Risks to the Price Forecast are Currently More Favorable to the Upside, But Will Eventually be Fairly Balanced.

The Bank of Japan (BOJ) stated in its quarterly outlook report that "risks to price outlook skewed to the upside for the time being, approximately balanced thereafter."

July 21, 2022 - 12:38 PM 252 views

Risks to the Price Forecast are Currently More Favorable to the Upside, But Will Eventually be Fairly Balanced.

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The Bank of Japan (BOJ) stated in its quarterly outlook report that "risks to price outlook skewed to the upside for the time being, approximately balanced thereafter."

Key Takeaways

As the effects of the epidemic and supply constraints fade, the economy of Japan is anticipated to recover.

Must keep an eye on changes in the financial and currency markets and how they affect the prices and economy of Japan.

There is a lot of uncertainty around the economy of Japan.

As the pandemic's effects lessen, the economy of Japan is strengthening.

Expectations for inflation are increasing.

Export growth is on the rise, but supply issues are having an impact.

There is intense downward pressure on output.

Even as rising prices put pressure on household real income, consumption is likely to keep rising.

Thanks in part to the weak yen, corporate profits will continue to be high overall.

As the supply restriction loosens, exports and output are projected to rise gradually in the future.

Board's core-core CPI median projection is +1.3% for the fiscal year 2022, up from +0.9% in April.

Board's core-core CPI median projection is +1.4% for fiscal 2023, up from +1.2% in April.

Board's core-core CPI median projection is +1.5% for fiscal 2024, up from +1.5% in April.

Board's real GDP median projection is +2.4% for fiscal 2022, down from +2.9% in April.

Board's median real GDP prediction is +2.0% for fiscal 2023, up from +1.9% in April.

Board's median real GDP prediction is +1.3% for fiscal 2024, up from +1.1% in April.

About BOJ Interest Rate Decision

The Bank of Japan(BoJ) announces its interest rate decision. In general, the BoJ raising interest rates and being pessimistic about the economy's potential for inflation is bullish for the JPY. Similar to this, it is negative or bearish if the BoJ has a dovish outlook on the Japanese economy and maintains the current interest rate or lowers it.

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